Exhibit 10.9


 


SEVERANCE
AGREEMENT


 


THIS SEVERANCE
AGREEMENT (this “Agreement”) is made and entered into as of September 26, 2003,
by and between National Mercantile Bancorp, a California corporation (the “Company”),
and Robert Bartlett (“Officer”) with reference to the following
facts:


 


A.            Officer is an officer of the Company
and/or one or more subsidiaries of the Company; and


 


B.            In order to induce Officer to remain
employed by the Company and/or its subsidiaries, the Company is willing to
agree to pay severance to Officer under certain circumstances.


 


NOW, THEREFORE, in
consideration of the foregoing and of the respective covenants and agreements
of the parties herein contained, it is agreed as follows:


 


1.             Definitions.  For purposes of this Agreement, the
following terms when used in this Agreement shall have the meanings set forth
below:


 


1.1           “Board”
shall mean the Board of Directors of the Company.


 


1.2           “Cause”
shall mean Officer, after the date of this Agreement, (i) has been
convicted by a court of competent jurisdiction of any felony or any criminal
offense involving dishonesty, breach of trust or misappropriation, or has
entered a plea of nolo  contendere to such an offense; or
(ii) has committed an act of fraud, embezzlement, theft, dishonesty or any
act which would cause termination of coverage under the Company’s Banker’s
Blanket Bond as to Officer (as distinguished from termination of coverage as to
the Company as a whole); or (iii) has committed a willful violation of the
Code of Conduct of any member of the Company Group or any law, rule or
regulation governing the operation of the Company Group which the Board
determines in good faith will likely have or has had a material adverse effect
on the business, interests or reputation of the Company Group or any Member
thereof; or (iv) has willfully refused to perform the duties assigned to
him; or (v) has committed a willful and unauthorized disclosure of
material confidential information regarding the Company Group, which disclosure
the Board determines in good faith will likely have or has had a material
adverse effect on the Company Group or any member thereof.


 


1.3           “Change
of Control” shall mean any transaction or series of related
transactions as a result of which


 


(i)            the Company consummates a reorganization,
merger or consolidation, or sale or other disposition of all or substantially
all of its assets (each a “Business Combination”), in each case unless
immediately following the consummation of


 

















 


such Business Combination
all of the following conditions are satisfied: 
(x) Persons, who, immediately prior to such Business Combination,
were the beneficial owners of the Outstanding Voting Securities of the Company,
beneficially own (within the meaning of Rule 13d-3 promulgated under the
Exchange Act, directly or indirectly, more than one-third of the combined
voting power of the then Outstanding Voting Securities of the entity (the “Resulting
Entity”) resulting from such Business Combination (including,
without limitation, an entity which as a result of such transaction owns the
Company or all or substantially all of the Company’s assets either directly or
through one or more subsidiaries); (y) no Person, other than the Existing
Shareholder Group, beneficially owns (within the meaning of Rule l3d-3), directly
or indirectly, more than 20% of the then outstanding combined voting power of
the Outstanding Voting Securities of the Resulting Entity, except to the extent
that such Person’s beneficial ownership of the Company immediately prior to the
Business Combination exceeded such threshold; and (z) at least
one-half of the members of the board of directors of the Resulting Entity
were members of the Board at the time the Board authorized the Company to enter
into the definitive agreement providing for such Business Combination; or


 


(ii)           any Person acquires beneficial
ownership (within the meaning of Rule 13d-3) of more than 20% of the
combined voting power (calculated as provided in Rule l3d-3 in the case of
rights to acquire securities) of the then Outstanding Voting Securities of the
Company; provided, however, that for purposes of this clause, the
following acquisitions shall not constitute a Change of Control:  (x) any acquisition directly from the
Company, (y) any acquisition by the Company, (z) any acquisition by
any employee benefit plan (or related trust) sponsored or maintained by the
Company or any entity controlled by the Company; or (zz) any acquisition by the
Existing Shareholder Group.


 


1.4           “Company
Group” shall mean at any time the Company and each subsidiary of the
Company at such time which is consolidated with the Company for financial
reporting purposes.


 


1.5           “Disability
of Officer” shall mean if Officer is Disabled and such disability
continues for a period of any six months out of a one-year period.  “Disabled”
shall mean Officer’s inability, through physical or mental illness or other
cause, to perform normal and customary duties which Officer is required to
perform for the Company.  In determining
whether Officer is Disabled, the Company may rely upon the written statement
provided by a licensed physician acceptable to the Company.  Officer shall allow examination from time to
time by any licensed physician selected by the Company and agreed to by Officer.  All such examinations will be conducted
within a reasonable time period.


 


1.6           “Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended, or any successor
statute.


 


1.7           “Existing
Shareholder Group” shall mean Carl R. Pohlad, members of the
immediate family of Carl R. Pohlad, and any affiliated Person of Carl
R. Pohlad or any member of his immediate family.


 


2

















 


1.8           “Good
Reason” shall mean with respect to Officer (i) Officer being
delegated or assigned material duties by the Board or the Chief Executive
Officer of the Company, by a communication in writing, which are substantially
inconsistent with the position and status held by Officer immediately prior to
the effective date of the Change of Control; or (ii) Officer having had
removed by the Board or the Chief Executive Officer of the Company by a
communication in writing such authority and responsibility which is necessary
to carry out the duties of the position held by Officer immediately prior to
the effective date of the Change of Control; or (iii) Officer having a
substantial and adverse alteration in the nature, status, or prestige of
Officer’s responsibilities due to the action of the Board or the Chief
Executive Officer, which is verifiable by tangible evidence; or (iv) Officer
being forced to relocate permanently to an office more than 25 miles from the
location of the Company’s executive offices as in effect immediately prior to
the effective date of the Change of Control; or (v) Officer having his or
her base compensation reduced by 10% or more from such base compensation in
effect on the date immediately preceding the effective date of the Change of
Control.  Notwithstanding the foregoing,
the loss of one or more titles, and corresponding responsibility(ies), shall
not be deemed to be “Good Reason”
under (i), (ii) or (iii) above provided that the Officer retains at least one
title no less senior than Executive Vice President at the Company or at least
one subsidiary bank of the Company.


 


1.9           “Outstanding
Voting Securities” of any Person means the outstanding securities of
such Person entitling the holders thereof to vote generally in the election of
directors of such Person.


 


1.10         “Person”
shall have the meaning ascribed to such term in Section 3(a)(9) of the
Exchange Act, which definition shall include a “person” within the meaning of
Section 13(d)(3) of the Exchange Act.


 


1.11         “Without
Cause” shall mean any termination of Officer’s employment by the
Company except for a termination (i) for Cause, (ii) as a result of
the death of Officer, or (iii) as a result of the Disability of Officer.


 


2.             Severance Payment.


 


2.1           Except as provided in Section 2.2, if
(i) Good Reason exists within one year following a Change of Control, and
Officer gives written notice to the Company within 90 days after the occurrence
of such Good Reason that Officer is terminating his or her employment with the
Company for Good Reason, or (ii) the Company terminates Officer’s
employment Without Cause within one year following a Change of Control, the
Company will pay Officer in a lump sum an amount (the “Severance Payment”) equal to six times
Officer’s base monthly salary as in effect at the time of termination or, if
greater, immediately prior to the effective date of the Change of Control.  The Severance Payment shall be reduced by
required deductions for applicable taxes and other withholdings and for any
outstanding obligations owed by Officer to the Company that are then due and
payable, which deductions and withholdings are specifically authorized by
Officer.  The Severance Payment shall be
in lieu of any other severance payments to which Officer would be entitled
under the plans or policies of the Company and any of its subsidiaries.  The Severance Payment will be paid at the
time of termination of the Officer’s employment with the Company.  Each Change of


 


3

















 


Control and each Good
Reason following a Change of Control shall give Officer a separate right to
give the notice set forth in the first sentence of this Section 2.


 


2.2           Notwithstanding any other provision
of this Agreement, the Company shall have no obligations to make the Severance
Payment if such Severance Payment is prohibited by applicable federal or state
law, including without limitation Part 359 of the regulations of the Federal
Deposit Insurance Corporation (12 CFR § 359 et
seq.) or any successor provision.


 


2.3           As a condition to the obligation of
the Company to pay the Severance Payment, the Officer must execute and deliver
a release in form and substance satisfactory to the Company releasing the
Company Group and its directors, officers, employees and agents (“Released Parties”) from any and all claims the Officer may
have against the Released Parties, whether such claims are known or unknown,
absolute or contingent, other than claims under this Agreement, claims for
salary and other compensation and benefits accrued prior to termination, and
rights under employee benefit plans.


 


3.             IRC Provisions.  Notwithstanding any other provision of this
Agreement, if the Company reasonably determines that the payment of the
Severance Payment to Officer would be nondeductible by the Company for federal
income tax purposes because of Section 280G of the Internal Revenue Code
of 1986, as amended (the “Code”),
the Severance Payment shall be reduced to an amount which maximizes the
Severance Payment without causing any portion of the same to be nondeductible
by the Company because of Section 280G of the Code.  Any such reduction shall be applied to the
Severance Payment or the other amounts due to Officer in such manner as Officer
may reasonably specify within 30 days following notice from the Company of the
need for such reduction or, if Officer fails to so specify timely, as
determined by the Company.


 


4.             Employee Benefits.  All employee benefits provided by the
Company shall cease upon termination of Officer’s employment, whether for Good
Reason, Without Cause, or for any other reason, and the Company shall have no
further responsibility with respect thereto after such termination; provided,
however, that: (a) nothing contained in this Agreement shall affect any
right Officer may have pursuant to the federal entitlement to continued group
health care coverage as provided in the Consolidated Omnibus Budget
Reconciliation Act of 1985 (“COBRA”)
or any successor legislation or comparable state law; (b) if Officer is
entitled to receive a Severance Payment pursuant to Section 2 hereof, and if
Officer elects under COBRA to continue to receive any benefits thereunder, the
Company shall reimburse Officer for the amount of such Officer’s COBRA payments
for the first six months after such termination; and (c) nothing shall alter or
modify the post termination rights of Officer under any employee benefit plan
(such as the right to exercise vested options for a specified period under the
Stock Incentive Plan).


 


5.             Term.  The Agreement shall commence on the date set
forth above and shall terminate upon 12 months’ prior written notice to the
Officer.


 


6.             Employment “At Will”.  Neither this Agreement nor the Severance
Payment payable hereunder shall be deemed to limit, replace or otherwise affect
the “at will” nature of


 


4

















 


Officer’s employment with
the Company Group.  Officer’s employment
with any member of the Company Group continues to be for an unspecified term
and may be terminated at will at any time with or without cause or notice by
such member of the Company Group or by Officer (but in the case of Officer,
without the written consent of the Company Officer must terminate his
employment with all members of the Company Group).  This employment “at-will” relationship cannot be changed absent
an express intent as set forth in an individualized written employment contract
signed by both Officer and the Chief Executive Officer of the Company.


 


7.             Mitigation.  Officer shall have no obligation to mitigate
damages based upon Officer’s termination pursuant to Section 2 of this
Agreement, and the Severance Payment shall not be reduced as a result of
Officer obtaining other employment within nine months of Officer’s
termination.


 


8.             Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall be deemed an original, and all of which,
together, shall constitute one and the same instrument.


 


9.             Partial Invalidity.  Any provision of this Agreement which shall
prove to be invalid, void or illegal shall in no way affect, impair or
invalidate any other provision hereof, and such other provisions shall remain
in full force and effect.


 


10.           Governing Law.  The terms and provisions of this Agreement
shall be governed and construed pursuant to the laws of the State of California
except to the extent governed by federal law.


 


11.           Construction.  Headings at the beginning of each section
are solely for the convenience of the parties and are not a part of this
Agreement.  Whenever required by the
context of this Agreement, the singular shall include the plural and the masculine
shall include the feminine and vice versa. 
This Agreement shall not be construed as if it had been prepared by one
of the parties, but rather as if both parties had prepared the same.  Unless otherwise indicated, all references
to sections are to this Agreement.


 


12.           Integration.  This Agreement represents the entire and
integrated agreement between the Company and Officer regarding the subject
matter hereof and supersedes all prior negotiations, representations or
agreements, either written or oral.


 


13.           Successors and Assigns.  The terms, covenants and conditions herein
contained shall be binding upon and shall inure to the benefit of the heirs,
successors and assigns of the parties hereto.


 


14.           No Waiver.  No waiver by either party of any breach or
default hereunder shall be deemed a waiver of any other breach or default, and
no delay or forbearance by either party hereunder in enforcing any of its
rights or remedies shall be deemed a waiver of any such rights or remedies,
unless such waiver is embodied in a writing signed by the authorized
representative of the party to be bound.


 


5

















 


IN WITNESS
WHEREOF, this Agreement has been executed effective on the day and year
hereinabove set forth.


 


	
  THE “COMPANY”

  	
  NATIONAL MERCANTILE BANCORP

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ SCOTT A. MONTGOMERY

  	
   

  
	
   

  	
   

  	
  Scott A. Montgomery

  
	
   

  	
   

  	
  Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  “OFFICER”

  	
  /s/ ROBERT
  BARTLETT

  	
   

  
	
   

  	
  Robert
  Bartlett

  



 


6